Zimbabwe’s third-largest mobile network operator, Telecel Zimbabwe, has reported a 5% slump in active subscribers in the first quarter of 2016 amid concern its customers could be losing confidence in the company on news it was taken over by government.
By Taurai Mangudhla
In the last quarter of 2015, news of government, which owns the second-largest mobile operator NetOne and fixed telephone subscriber TelOne, taking over the 60% equity stake owned by VimpelCom in a US$40 million deal filtered into the market with plans to acquire the remaining stake in due course.
Latest figures from the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) show that the three mobile network operators —Econet Wireless (Econet), NetOne and Telecel — jointly reported a 1,1% growth in active subscribers from 12,7 million to 12,9 million largely driven by a 5,5% growth in active subscribers at NetOne from 4,1 million to 4,4 million subscribers.
Econet’s active subscribers was flat at a 0,2% growth.
“Telecel was the only operator to experience a decline in active subscriptions as shown above. On the other hand, NetOne had the largest growth in active subscriptions (5,5%). This is attributed to the intensity of promotions on the NetOne network hence consumers move to maximise their utility,” said Potraz in the report.
Telecel has the largest number of inactive subscribers on its network at 57,3%, followed by Econet at 27,7% and NetOne at 19,7%.
An active mobile subscription is defined as a mobile line which has been used to make and/or receive a call, send and/or receive a message or used the internet within the past 3 months (90 days).
In terms of total subscribers, Potraz said, the total number of mobile subscriptions in the country as at March 31 2016 was 18 992 082, representing a 2,5% decline from 19 477 307 total subscriptions recorded as at 31 December 2015.
Econet had 9,3 million subscribers while NetOne and Telecel had 5,4 million and 4,3 million subscribers respectively.
“The decline is attributed to the removal of unused lines from the networks. Mobile lines that exceed 1 year of no activity are removed from the network by the mobile operators,” said Potraz.
Telecel also lost market share from 15, 1% to 14, 1% in the quarter under review while Econet’s market share also fell from 52,5% in the last quarter of 2015 to 52,1% in the reporting period.
NetOne was the only company to report a marginal growth in market share from 32, 4% to 33,8%.
Insiders at Telecel said the decline in market share was attributable to having or using multiple sim cards, referred to as multi-siming as well customers who move from networks for various reasons including promotions.
Apart from that, said an insider who requested not to be named, the slump in inactive subscribers is a deliberate result of trying to manage network resources by removing subscribers on the network who are not using the network.
“Each network has a capacity and Telecel’s capacity is set at five million. Therefore Telecel periodically removes inactive subscribers to free up network resources. At any given time Telecel will have between 4,5 –and 4,8 million subscribers on the network and reserves the right to remove the inactive subscribers to ensure network capacity is within the limit,” said the Telecel source.
“It is important to understand that the clean-up exercise does not in any way reflect a loss in subscribers as these subscribers are already not active on the network. Some networks will chose to keep an inflated HLR (home location register) with many inactive subscribers. Although the total number of subscribers on their books looks impressive the reality is many of those ‘subscribers’ would not be active and therefore do not contribute revenues.” Efforts to get an official comment from Telecel CE Angeline Vere were fruitless at the time of going to print.
Sources at Econet’s commercial department attributed the decline in active subscribers to the liquidity crunch which has limited consumer spending power.
According to the report, the mobile operators generated a total of US$167,7 million in the first quarter of 2016, a 12,3% decline in revenues from US$191,1 million recorded in the previous quarter.
Mobiles revenues stood at US$219 million in the fourth quarter of 2014 before they went on a slippery slope.
“All the mobile operators registered declines in their revenues. Mobile revenues have been declining due to the substitution of traditional mobile services with Over-the-Top services as well as the general economic environment,” said Potraz.
Mobile data utilisation increased by 25,5% to record 1,510,379,839MB from 1,203,378,839MB recorded in the previous quarter. Potraz said total national voice traffic declined by 15,3% to record 1 billion minutes from 1,2 billion minutes recorded in the previous quarter.
International incoming and outgoing traffic declined by 16,5% and 13,8% respectively as shown above. The overall decline in mobile voice traffic is attributed to the substitution of mobile voice service with cheaper Over-the-Top services. International traffic has been the most affected.